Criminal Law

Racketeer Influenced and Corrupt Organizations (RICO) Law

The federal Racketeering Influenced and Corrupt Organizations (RICO) law was passed in 1970 as the "ultimate hit man" in mob prosecutions. Prior to RICO, prosecutors could only try mob-related crimes individually. Since different mobsters perpetrated each crime, the government could only prosecute individual criminals instead of shutting down an entire criminal organization. Today, the government rarely uses RICO against the Mafia. Instead, because the law is so broad, both governmental and civil parties use it against all sorts of enterprises, both legal and illegal.

RICO allows for prosecution of all individuals involved in a corrupt organization. For mob prosecutions, that means that the government can go after top leadership as well as the hit men and capos. And RICO established much enhanced sentences, as well. John L. Smith described the impact of RICO in an article for the Las Vegas Review-Journal: "After RICO, mob families began to crack under the very real threat that members and associates could be indicted en masse for a wide range of criminal activity. ... [E]ven the strongest stand-up guy would have trouble fading the 20-year (and more) sentences that began accompanying RICO convictions."

While RICO was originally aimed at the Mafia, over the past 37 years, prosecutors have used it to attack many forms of organized crime: street gangs, gang cartels, corrupt police departments and even politicians.

Criminal RICO

To violate RICO, a person must engage in a pattern of racketeering activity connected to an enterprise. The law defines 35 offenses as constituting racketeering, including gambling, murder, kidnapping, arson, drug dealing, bribery. Significantly, mail and wire fraud are included on the list. These crimes are known as "predicate" offenses. To charge under RICO, at least two predicate crimes within 10 years must have been committed through the enterprise.

Note that an enterprise is required. This might be a crime family, a street gang or a drug cartel. But it may also be a corporation, a political party, or a managed care company. The enterprise just has to be a discrete entity; but an enterprise is not the same as an individual. Thus, a corporation may be the enterprise through which individuals commit crimes, but it can't be both an individual and the enterprise.

The criminal RICO statute provides for prison terms of 20 years and severe financial penalties. The law also allows prosecutors to attach assets, so they can't be whisked out of the country before judgment.

Civil RICO

Even though RICO threatens very long prison terms for racketeers, the law's real power is its civil component. Anyone can bring a civil suit if they've been injured by a RICO violation, and if they win, receive treble damages. In the 1980s, civil lawyers attempted to fit many different claims inside of RICO, but in the 1990s the federal courts set up a number of hurdles for civil RICO claims. To succeed on a RICO claim, a plaintiff must show:

Criminal Activity. You must show that the defendant committed one of the enumerated RICO crimes, which include the broad crimes of mail and wire fraud. If you bring a claim on a fraud basis, however, the court will apply strict scrutiny.

Pattern of Criminal Activity. One crime is not enough. You have to show a pattern of at least two crimes. A pattern requires the crimes be related in some way—same victim, same methods, same participants—or continuous, meaning it was conducted over at least a year.

Within the Statute of Limitations. The Supreme Court held that RICO has a four-year statute of limitations, which begins tolling from the time the victim discovers his or her damages.

RICO is powerful and complex. If you think you've been seriously injured by criminal activity that is covered by RICO, consult with a lawyer to see if you have a case. But make sure it's worth the effort. RICO civil suits can be very costly.

SMU Dedman School of Law professor Joanna L. Grossman comments on a recent decision by the Arizona Supreme Court that correctly applies the US Supreme Court’s reasoning in Obergefell v. Hodges to hold that the marital presumption applies to same-sex couples just as it applies to opposite-sex couples.